Update to CJRS claim calculations guidance

14 September 2020

HMRC has updated guidance on specific calculations in relation to claims made under the Coronavirus Job Retention Scheme (CJRS).

Where an employee is taken off furlough or flexible furlough part way through a claim period, their employer should only calculate the amount to be paid on the basis of the days that the employee was on furlough. This is true even if the employer has to claim through the service for a longer period in order to align their claims.

HMRC has additionally confirmed that employers who have historically used this calculation will not need to adjust their previous claims but should use the new calculation process going forward.

The below example is provided on the guidance page:

“Employee has a calendar month pay period and usually works 40 hours per week. The employee was paid £2,000 in the last full monthly pay period before 19 March 2020. The employee was furloughed continuously from 13 April to 30 June. They are flexibly furloughed from 1 July, working 10 hours per week. The flexible furlough agreement ends on 12 July and the employee returns to work their full usual hours from 13 July.

The employer works out 80% of the employee’s wage:

  1. Start with £2,000 (employee’s wages)
  2. Divide by 31 (the total number of days in July)
  3. Multiply by 12 (the number of furlough days in July)
  4. Multiply by 80% - which is £619.35

The employer should disregard any usual hours, working hours and furloughed hours after 12 July because the employee is no longer furloughed after that date, even if the employer has to claim for a longer period such as 1 - 31 July (for example to align claim periods when claiming for multiple employees).”

 


The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.

 

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